What is the importance of measuring per capita ...

[geodog55]

What is the importance of measuring per capita GDP?

Question 2

Which of the following statements is true?
 a. Goods are scarcer than services in an economy.
  b. Goods are scarce for neither the poor nor the rich.
  c. Goods are scarce for both the poor and the rich.
  d. Goods are scarce for the poor but not for the rich.
  e. Goods are scarce for the rich but not for the poor.

[SAUXC]

Answer to Question 1

When examining GDP as a crude welfare measure, an adjustment must be made for population change. If population growth is not taken into account, we can be misled by changes in real GDP values. If the population growth rates exceed the growth rate in real GDP, real GDP per capita will actually decline even though real GDP is increasing.

Answer to Question 2

c